Uncertainty and the Bank of England's MPC

Uncertainty and the Bank of England's MPC

We investigate how recently developed measures of uncertainty affect the voting behavior of individual Bank of England Monetary Policy Committee (MPC) members. To determine the precise impact of uncertainty on individual policymakers, we estimate the standard errors of member-specific parameters in...

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Bibliographic Details
Main Authors: Chappell, H.W., Greene, William, Harris, Mark, Spencer, C.
Format: Journal Article
Language:English
Published: WILEY 2021
Subjects:
Social Sciences
Business, Finance
Economics
Business & Economics
monetary policy
random parameters
uncertainty
voting
MONETARY-POLICY
OUTSIDERS
POWER
Online Access:http://hdl.handle.net/20.500.11937/86467
Description
Summary:We investigate how recently developed measures of uncertainty affect the voting behavior of individual Bank of England Monetary Policy Committee (MPC) members. To determine the precise impact of uncertainty on individual policymakers, we estimate the standard errors of member-specific parameters in a random parameters ordered probit framework. We find that uncertainty is typically associated with voting to ease the policy stance. The Bank of England's in-house uncertainty index plays a prominent role in driving voting behavior. Based on this measure, the MPC emerges as a diverse group of activist risk managers.

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